Staff who work beyond 65 'should still pay National Insurance to help younger workers'

Elizabeth Truss is one of the MPs behind the report which suggests those over 65 should still pay NI

Older workers who choose to stay in their jobs beyond 65 should pay national insurance to support young workers, a group of Tory MPs has said.

Up to £2 billion a year could be raised by imposing National Insurance on the income of Babyboomers who are still in work.

The money would be used to give young, low paid workers a National Insurance ‘holiday’ to allow them to get ahead.

The recommendation is on the back of studies showing that this generation of young workers is likely to end up worse off than their parents.

At the moment, older workers are not required to pay National Insurance - although their bosses have to pay 13.8 per cent - because the money is perceived as being for pensions and benefits.

The tax break means that the over-65s get a significant pay rise just for choosing to work longer.

And with the default retirement age due to be scrapped, more and more older employees are expected to take advantage of not having to pay National Insurance and stay in work for a few more years.

In their report, Policy Bites: Seven Shots in the Arm of Britain the MPs said: ‘Over 65s who continue to work should pay National Insurance contributions on their earned income, just like anyone else they work with.

Extra NIC income could be used to give NIC holidays (employee and employer) to young low-paid workers.’